Recommendations from the BC Auto Industry

Climate leadership plan: incentives more effective than mandates

In the coming days, 195 countries and sub-national jurisdictions around the world will come together in Paris to re-focus collective efforts to address climate change. Our Premier, along with BC Environment Minister Mary Polak, will join Prime Minister Trudeau and other provincial and Indigenous leaders for the 2015 United Nations Climate Change Conference (COP 21).

Earlier this year, the Government of B.C. created a Climate Leadership Team and invited British Columbians to participate in a survey to help build the next phase of climate action.

In November, the provincial government announced key findings from the public survey, and posted preliminary survey results which showed 92% of participants agreed that climate change is a serious issue.

In addition to 5,973 completed surveys, the provincial government also received over 200 detailed written submissions and more than 300 template letters.

Almost half of the respondents said the cost of climate change should be considered when making important decisions.

Using clean transportation to move people and goods was identified as the next important step in meeting the province’s short-term emission reduction targets.

Focusing on community design to minimize energy use and travel, and integrating more low-carbon buildings was selected as a key priority in meeting long-term climate action goals.

Building a strong economy where jobs are created and greenhouse gas emissions are reduced was seen as important in meeting both short and long term climate action goals.

After reviewing the various discussion paper submissions and the Climate Leadership Team’s recommendations, the Government of B.C. is expected to release a draft Climate Leadership Plan for public comment any time now.

In our submission to the Climate Leadership Team, we strongly urged the provincial government to take an incentive-based approach, instead of a mandated approach that punishes consumers and business. Specifically, the New Car Dealers Association of BC asked the Government of B.C. to: • Maintain funding for the highly popular Clean Energy Vehicle for BC (CEVforBC) Point of Sale Incentive Program. CEVforBC is a progressive step in the right direction to help encourage the adoption of new CEVs across our province. As part of this incentive program, B.C. residents, businesses, non-profit and local government organizations who purchase or lease qualifying new CEVs are eligible for up to $5,000 off the pre-tax sticker price. Those who buy a harder-to-find hydrogen fuel cell vehicle can receive a $6,000 discount. Additionally, the BC Government should provide adequate funding for needed charging infrastructure, especially for workplaces. • Provide new funding for the BC SCRAP-IT Program. The SCRAP-IT program is an effective environmental program that substantially reduces both greenhouse gases (GHG) and smog emissions. Vehicle models 2000 or older are said to emit up to 60 times more emissions than new vehicles. All scrapped vehicles and their components are permanently and properly recycled. • Allow qualifying clean energy vehicles full access to High Occupancy Vehicle (HOV) lanes. The goal of both HOV lanes and EVs is to reduce the production of greenhouse gases (GHG). This additional perk would provide a significant additional incentive for consumers in B.C. to drive emission-free vehicles. • Further, we strongly urged the Provincial Government not to set mandates on Zero Emissions Vehicles (ZEV).

A ZEV mandate would set a required increasing annual percentage of Plug-in Electric vehicles that each vehicle manufacturer must sell to their dealer network. A ZEV mandate policy would likely require a restriction in the sale of conventional vehicles in order to achieve the significantly increasing percentage of Plug-in electric vehicles specified by the mandate. This policy will have a significant negative impact on consumers’ access to the vehicles BC families and businesses require to meet their transportation needs. Another likely result of this policy would be that consumers and businesses will need to keep their existing older higher emission vehicles longer, which will undermine the government’s objective of reducing vehicle greenhouse gases (GHG) emissions from the existing on-road fleet. Furthermore, in the North, Interior and Vancouver Island regions of the province, pickup trucks and SUVs are a necessary way of life for many individuals and families. If manufacturers are forced to sell a certain percentage of ZEVs, such a policy will likely result in reduced availability of traditional vehicles, or possibly have manufacturers withdraw from our regional markets altogether.

Vehicle mandates to manufacturers and distributors do not increase customer demand for ZEVs as shown in the U.S. In other jurisdictions, direct and indirect incentives have been found to be more effective at increasing the uptake of plug-in electric vehicles. Georgia, U.S, and Norway (highest proportion of electric cars in the world) are examples of jurisdictions where no zero emission vehicle sales mandates exist, but vehicle incentives and a series of complimentary policies have resulted in a higher percentage of plug-in vehicles being sold versus the zero emission vehicle model. Vehicle mandates may seem to be an easy solution, but in fact they distort the market and generally result in reduced availability of vehicles that consumers need to meet their families transportation needs.

The 400-plus new car dealers across British Columbia employ more than 37,000 British Columbians and contribute close to $1.9 billion to the provinces’ total gross domestic product annually. As a key contributor to British Columbia’s economy, we fully understand and embrace our responsibility to addressing climate change. In fact, B.C.’s New Car Dealers take pride in the environmentally friendly choices we make every day in our dealerships, from the services and items we provide to the products that we purchase and how we recycle. The auto industry in B.C. has been a thought leader at the forefront of the climate file by implementing environmental stewardship programs for tires, oil, batteries and cars. Just recently, one of our members took this responsibility one step further by constructing a new dealership that was recognized as the most environmentally sustainable retail dealership in the world among that brand.

Ultimately, we agree with Premier Christy Clark and Prime Minister Justin Trudeau that all of us in BC and Canada need to be actively pursuing clean energy initiatives – we just want to see it done in a balanced way that is beneficial to consumers, industry and the environment, as well as being viable for years to come.